The Chris Voss Show - The Chris Voss Show Podcast – Fair Pay: How to Get a Raise, Close the Wage Gap, and Build Stronger Businesses by David Buckmaster

Episode Date: July 15, 2021

Fair Pay: How to Get a Raise, Close the Wage Gap, and Build Stronger Businesses by David Buckmaster An expert takes on the crisis of income inequality, addressing the problems with our current compensation model, demystifying pay practices, and providing practical information employees can use when negotiating their salaries and discussing how we can close the gender and racial pay gap. American workers are suffering economically and fewer are earning a living wage. The situation is only worsening. We do not have a common language to talk about pay, how it works at most companies, or a cohesive set of practical solutions for making pay more fair. Most blame the greed of America’s executive class, the ineptitude of government, or a general lack of personal motivation. But the negative effects of income inequality are a problem that can be solved. We don’t have to choose between effective government policy and the free market, between the working class and the job creators, or between socialism and capitalism, David Buckmaster, the Director of Global Compensation for Nike, argues. We do not have to give up on fixing what people are paid. Ideas like Universal Basic Income will not be enough to avoid the severe cultural disruption coming our way. Buckmaster examines income inequality through the design and distribution of income itself. He explains why businesses are producing no meaningful wage growth, regardless of the unemployment rate and despite sitting on record piles of cash and the lowest tax rates[0] in a generation . He pulls back the curtain on how corporations make decisions about wages and provides practical solutions—as well as the corporate language—workers need to get the best results when talking about money with a boss. The way pay works now will not overcome our most persistent pay challenges, including low and stagnant wages, unequal pay by race and gender, and executive pay levels untethered from the realities of the average worker. The compensation system is working as designed, but that system is broken. Fair Pay opens the corporate black box of pay decisions to show why businesses pay what they pay and how to make them pay more.

You wanted the best. You've got the best podcast, the hottest podcast in the world. The Chris Voss Show, the preeminent podcast with guests so smart you may experience serious brain bleed. Get ready, get ready, strap yourself in. Keep your hands, arms and legs inside the vehicle at all times. Because you're about to go on a monster education roller coaster with your brain now here's your host chris voss hi folks chris voss here from the chris voss show.com the chris voss show.com hey we're coming here in a great podcast we certainly appreciate you tuning in oh my gosh guys welcome to another show like we just keep making them more and they just keep coming we just be putting in the google machine great authors and they just show up every day there's sometimes there's two

a day actually and they show up every day so make sure you subscribe to the chris voss show if you haven't already refer the show to your friends neighbors relatives dogs cats get everybody listening to the show just play it when you leave for work so the cockroaches have something to listen to. Maybe they'll be smarter and move out. There you go. Go to goodreads.com forward slash Chris Voss. Follow us over there. See what we're reading or reviewing. Go also to all of our groups, Facebook, LinkedIn, Twitter. If you put in the Chris Voss show anywhere, you're going to find so many different groups and accounts and everything. We just dominate social media. We try to as much as we can.

Also, go see the video version of this on YouTube.com, for which that's Chris Voss. And you can hit the bell notification there, follow everything we're doing. We're also on LinkedIn Live. So if you're following us over there, go see the live version on LinkedIn. It's pretty cool. And plus, you don't get that annoying music that we have at the beginning, which is actually fun. Anyway, today we have a most amazing author, and I think he's going to blow your mind. He's going to enlighten you. He's going to make you so smart. It might improve the quality of your skin and maybe your sex life. I don't know. My lawyers say I can't say that's

a definite, but what do you know? Listen to the show. You might just have amazing things happen to you. So anyway, enough with my BS and everything that I do to pitch a show. Let's get into our author that we'll be talking about today, who he is, what he does. He's put out this new book that we'll be talking about today, and the book is called Fair Pay, How to Get a Raise, Close the Wage Gap, and Build Stronger Businesses. His name is David Buckmaster and we'll be talking to him today about his book that's just June 29th, 2021 came out and he's got an amazing history with him. He is an expert on pay who has led corporate compensation teams at Nike, Starbucks, and Yum! With an exclamation mark. That's a brand actually. People are like, why is he saying Yum? Is he hungry? I am on a diet. So that could be true too as well. Brands work with him and

business leaders work with him on pay projects all over the world. Mr. Buckmaster, ironically named for a guy who's into pay. It was named to the global shortlist of the 2018 Financial Times and McKinsey and Company Bracken Bauer Prize for Emerging Business Writers. Bear Pay is his first book. He's originally from Tampa, Florida. We'll hold that against him. I'm just kidding. We love our Tampa, Florida people. Buckmaster now lives in Portland, Oregon. Stereo, what is it? Stereotype with his wife? Oregon stereotype with his wife. He's going to have to explain that now. Daughter and a Labradoodle. For more information, you can visit his book link. What is it? DavidBuckmasterBooks.com. Welcome to the show, David. How are you? Hey, Chris. Thanks for having me. I will say, I think I'll have to put the skin tips and sex tips in the updated version of the book. I just feel like being smarter and collecting knowledge and curating great information and data like what you put in your book just makes you better.

So there's that. What is the, now lives as a Portland, Oregon stereotype with his wife? What is that? You already made fun of Tampa, so let's just jump into that, right? So I grew up being like the Florida man where all the crazy stuff happens, and you get used to making fun of people that are from Florida, and that's okay. Moved to the other corner of the country. I'm in Portland, and now there's all the Portland-ed, Portland-ed stereotypes.

Portland, yeah. Yeah, it's a joke. Just to say say yeah we've got like an obnoxious coffee machine downstairs and we've got a labradoodle and we're in all the uh kind of normal portland things that you would expect it's just trying to lighten it up a little bit after the whole mckinsey breckenbauer stuff so it's uh yeah there you go you've gone from so would it be fair to say you've gone from one extreme to another i don't know i watched that portlandia show that makes fun of portland and it's quite funny it is yeah and i think the i think what i've heard from plenty of people in portland is that it's actually tough to watch because it's more of a documentary than a spoof because i remember there's just this one scene

where four cars show up at a four-way stop at the same time and like the joke because it's fred armisen just goes on for 10 times longer than anybody's comfortable with and that's so true that happens all the time because everybody's so passive here and that's i mean they just nailed the show yeah um it's a great place to live though the joke is portland is where young people go to retire and pretty apt for sure there you go there you go at least you're not in that crazy florida there's a that place is always interesting if florida's i always say, Florida is the Florida of America. Or no, Florida is the Florida of Florida.

Yeah, it's unique for sure. I don't know if you've ever seen that Bugs Bunny cartoon where everybody's like sawing off the state and it just floats into the Atlantic Ocean. Yeah, get it. Absolutely. So I'm totally, like, I'm the Florida man on my team. And people are always super curious about alligators. We can talk about alligator facts if you want to, because that's just part of life in Florida.

But yeah, I'm used to getting made fun of, so feel free to lean into it. Although you did make fun of Tampa, and I will say, my Lightning just won the Stanley Cup back-to-back. The Bucs are Super Bowl champions, and the Rays are doing pretty well. So we're in the end of the world when Tampa is winning championships left and right, I guess. That could be a sign, then. I think that's in the Bible, isn't it? Yeah, I think the Aztecs said that, right? The sub-four horsemen, I believe, Florida. Let's get to your book and talk about the book. I shouted out your plug from the bio,

but give us whatever plugs you want to do. Tell people where to find you on the interwebs and buy your book. Sure. So the place where I'm keeping everything is just my website, davidbuckmasterbooks.com. I have most of the socials, not all of them, but I'm most active on Instagram. So you can follow me at d.buckmaster on Instagram, LinkedIn. Feel free to reach out to me on that. The book is available, like you said, Chris. Right now, I think there are a little bit of supply chain issues out there. I did some of the indies, but everywhere else that you'd like to buy your books, it's available now. So thank you in advance for checking it out. There you go, guys. Order it up. Give us some, why did you write the book? What made you go? And this is

your first book. So what made you go turn it? I'm writing a book. So ultimately I'm a practitioner. I work in something called total rewards or compensation. We're like a, like a really hidden away team on most big companies, HR staff, and people don't really know we exist, but our job is to try and figure out how much money should we pay people. So it's one of those things where everyone you would think would want to be nice to you, but they're always kind of upset. And so I'm a middish career. And there's a part of me that just knows that we can't be doing this the exact same way for the next 20 years. Because I think, or at least for the rest of my career, I guess I'm only thinking about this maybe selfishly, but it's one of those things

that the way that we think about this stuff now clearly is not resonating with employees. Pay is such a personal topic and everybody's got really strong opinions about it because it's their livelihood, right? Like it's how you go on vacations, afford your kid's school and dental bills and all of that fun stuff. But there's this stat at pay scale, there's this compensation research firm that says about one in five people believe they're paid fairly. If our as HR, whatever it is, if we are, if our customers are essentially our employees, like we wouldn't, you wouldn't tolerate four out of five people thinking that your product is swindling them or hoodwinking them somehow. So there's something that we do that it's not resonating. And we see this in kind of the broad macro sense too, right? Wages have been stagnant for a long time.

Executive pay is really high. I saw a past episode that you posted this morning about maximum pay, and I had to listen to it right away before we talked about this. It's clearly like, I'm trying to approach this from the industry side and say, what's going on? How do we think? How do we get out of this black box of pay and start helping people understand what goes into this so we can make the entire ecosystem a lot better? So the book did not set out to write a book initially. It was one of those things where I wrote an essay for that contest. It went well. And then things started to fall in place from there.

But I grew up, my mom was a librarian. Both my parents are big readers, books all over the house. It's just always been natural. I love writing. This isn't the first thing I've written, but I just really just a dream come true to have this opportunity. This is pretty interesting. And you've worked inside these companies to try and tackle this sort of issue. When I grew up in high school, I started reading the tea leaves.

And at that time, when I was leaving high school, I graduated in, what, 1986. And it was the rise of the age of the, I was a Donald Trump fan at that time, certainly not now. I watched the arc of his career and his bankruptcies and his failures. I even had his recession book that he pulled back that was honest rise where suddenly there was a sea change in what I've been as a child was you go to work for a big company, you work there for 40 years, you get a gold watch, you get a retirement, you have the two-car garage, that whole Levitt style nuclear model, age model that everyone was trying to somehow get back in the box after Reagan. And I think the recession of what Nixon and a lot of disruptions that were starting to really take place in the world and economy, especially as we globalized. And I could see there's a lot of stuff going on where they're like the middle class is going to fall apart. And that's when you saw this increase in, and it was really sudden. I remember at the time, watching suddenly this thing where

Wall Street's, hey man, if you want the share price to go up, you just lay off bunches of people. And you saw this whole greed economy that came out of Wall Street with the Ivan Biosky area, acquiring businesses, trashing them, and throwing out employees, and all this stuff where there was this rise of executive pay where it just amplified. And then over the last 40 years, we've had wages stay stagnant and there's little to no minimum wage increase. And we've seen the dissolving of the middle class. And now everyone just seems to always be at their wits end, struggling. Most people don't have savings. They can't survive maybe a month without pay. And you have people that if you fall ill, you can fall into bankruptcy.

It's really turning into quite a mess. In fact, it's reaching those points that you see with that, that, that bring in fascist governments or communist governments or different other governments where people are just fighting for scraps. It seems I've watched the whole dissolving us being manufacturing to a service economy, But there's not a lot. Anyway, I'm going to quit orientating here and let you talk because no one wants to hear me. But I watched a lot of this. So talk to us about different aspects of the book and that plays in. Tell me if I'm wrong or right or whatever you think.

My personal history is I was born in the Reagan era. So I've really only seen this version of the world. What I'll say is COVID really highlighted a lot of the issues that you brought up. It's amazing how quickly we went from, hey, these workers are essential to, hey, these workers are freeloaders and they need to get back to work.

So we have this like very interesting ethical conversation depending on where you are in the pay scale. If you're low in the pay scale, it's all about, do they deserve it? Are they worth it? Do they have any skills whatsoever? Like we start, these are questions of humanity. We also layer on the economic front.

We layer on questions of what about inflation? If we give them any sort of pay increase. Now on the other end of the scale, it's completely the opposite of that, right? Now it's talking about performance and this is just the natural way of competition for things. We have to invest at the top end of the scale. Like there's no, there's really no strings around this. There's no limits. There's nothing. So I think your point is spot on in the sense that we just

have fun, different ways of thinking about the high, low version of this. And what I've tried to do in the book is to try and in the first half, it's called pay as it could be or pay as it is. And what I'm trying to do there is just unlock the black box of how pay works at most companies. I think people will be surprised to understand that it really works very similarly at almost every big company in the world. We look at the same survey sources. We have the same mentality. We do the same certifications. I could theoretically drop into any company in the world right now and be up and running in a week or two. And that's not because of any great skill that I bring, but just because

of how consistent our industry is. And we're hidden away, so we don't really get challenged on that stuff. And while I'm talking about companies, let me also just give my little plug to say I'm here not as a spokesperson of any company that I work on, but these are just my thoughts around pay, right? I have to give that disclaimer while we're here. The second half of the book is talking about pay as it could be. So I was talking earlier around the kinds of questions we're getting asked now around how do we close the gender wage gap? How do we make sure people are paid a living wage? Those kinds of

things. How do we get more transparent and open up this black box? The way that my industry functions right now is not equipped to meet those challenges, but we're going to have to do it very quickly. So that's the primary reason I want people to be able to push those conversations from bottom up in their companies to understand what we're doing. But I also want my industry to change in a pretty dramatic way. And I need executives to make sure that you keep this on the agenda. Fair pay has to stay on the agenda. Otherwise, we will continue to create, just push the problems that we have now until what I worry, is there a point of no return when we just don't get this back? And people will say, let's just throw the entire system out the window,

which I think would be quite harmful. Which would be, we'd have to go to communism, flat pace, or something, wouldn't it? Is that the model we'd... I would hope not, personally. I think, like, I don't... I was just wondering if that's the model you would refer that we would end up at

in a worst-case scenario. I don't know what it would be. Or it could be something like what you see in Brazil or South Africa, where things are so extreme that it it creates so it's a collapse of the economy and yeah just one one thing collapses to another and it just becomes a free fall here just a spiral of uh not not good things but i think you're starting to see some of the language now around around capitalism in general and say let's let's abolish it or let's change it fundamentally and like there are very there are like the edges for sure have to get sanded off this thing.

But what I think people mean by that is not so much that they don't like going, you know, to their local main street, their local farmer's market. Those are market-based enterprises. I live in Portland. It's deep blue, but we love our local markets. We love our local vendors.

They're like that, these market-based economies are great. And they solve a lot of problems. They're not, they're probably not the ideal system for everything, but I think we do need to preserve that. But what I think people, when they say, let's abolish it, let's throw it out the window, I think what they mean is they get upset when they feel like they've lost a sense of autonomy over their own lives. And that's true, depending on where the concentration of power is. So to your point, if you've lost all sense of power, everything is state-run, owns the means of production, communism, you have no autonomy of your life or your economic condition

in that regard. In the same respect of all the power shifted to corporations, a lot of the same outputs happen too, right? There's only you have no say over your employment conditions, your wages, you don't even know how they're set, you've got limited mobility, like the social class you're born into, there's not much opportunity for you to escape out of that. So I think when people get really upset, it's because of this extreme where they just feel like they've lost control. And so one of the things I'm trying to do is help people retake control over their pay, over their career. There you go. Now, you mentioned and touched on gender issues of pay and equity and racial in the book. I was just going through the thing on the book. There's a lot of arguments. Is there really a gender pay gap? Is there really a racial

pay gap? I think probably you have, as an expert, probably have more insight to this. And so help clarify that for us, if you would, in your opinion. Yeah. So the core of this is the definitions, right? Because I think if you're on the left, I'm going to make some generalities here. If you're on the left, you tend to focus on something called the wage gap. Let's say women make 71 cents on the hour or 71 cents on the dollar, as opposed to men.

Black workers make 64 cents as opposed to white workers' wage gap. There's the other part of it, which is pay equity, which is what most companies focus on. And these are distinct definitions, but I think we tend to find our own camp on this. And like, really, like, we're mixing it up. And I think that's the core of a lot of our debate. Because sometimes you'll hear, well, is there really a wage gap? Is there not?

And the answer is yes. But we're talking about two different definitions. So when we say pay equity, what that means, and what most companies are trying to get after is let's figure out, okay, what are the differences once we control for where you're based in the company, the job level you're in, your experience, your whatever sort of factors that a company would express as being acceptable for pay differences, performance, that kind of thing. That usually is a smaller gap. Pay gap. So there's pay equity, then there's the pay gap. The pay gap is talking about what are the broader systemic implications of, let's just take the average pay for women versus average pay for men. And so it doesn't control for any of those things.

Now, when you hear somebody say the real pay gap is X, that's a tell that they really don't understand the issue because they're just mixing two definitions at the same time. So you can have a zero pay equity gap in your company, meaning that when you control for the whole list of factors, there's no gap. at the same time. So you can have you can have a zero pay equity gap in your company, meaning that when you control for all the whole list of factors, there's no gap and you can have a pay gap in your company. So what that means is if you are like, let's say the entire senior leadership team is white, naturally, like your pay, your raw pay gap, those just the arithmetic numbers, you're going to show an actual gap there between because the men are in different positions

than the women, for the most part in this example. Now, if you were to separate that out on the pay equity side, you might be okay there. So I go through this in great depth in the book just to explain what these calculations mean. But I think the takeaway is there are two definitions. And if you hear somebody say that the real pay gap is X, honestly, they don't know what they're talking about. So it's a real thing. We just have to get very crisp about what we're trying. This is always interesting to me because I've been trying to get to the bottom of this argument and find where the truth is. I don't know what the truth is. I want everyone to have equity. I want everyone to, I want everyone to get paid the same. There's the, so what you're saying, and it sounds like if people really want

to get to the bottom of this, go buy the book, which I will be reading. It sounds, so are you telling me that my understanding of the pay argument of the gap is there's six white women on a, or there's six women on a board. And there's six guys on a board, let's say. We'll just make up some numbers. And somehow those six women on the same board at the same level in the same jobs are not being paid the same. Is that accurate or true? Or is it because you told me earlier that it's not we're saying, okay, these guys on the board make this, but maybe someone in middle management makes that. And that's not the same. And that makes no logical sense, because those people don't have the same jobs. So you're speaking about this kind of the two different gaps. So let's take your your example,

let's say they're all on the board, they have the your example let's say they're all on the board they have the same let's say they're all at the evp level like the board pays a bit different right like that let's just say they're all executive vice president of marketing for whatever reason this company's got six evps of marketing no company's gonna have that but let's just go with it they all make x uh dollars um a year in total comp and then you can split it around racial gender lines or whatever there's going to be no pay equity or gender wage gap in that respect now because they're in the same job they are making the exact same amount of money there's no gap whatsoever so that's pay equity so companies their companies are clearly more complex so they won't they won't be able to cut it that uh finally that's the pay equity gap. Now, we can't universally say it is or isn't there, right?

Every company is going to have their own set of data around whether that's there or not. So some companies, a lot of companies have gotten very good at saying we pay for every dollar a man makes a dollar. Like that stuff's pretty rigorous. There's like usually farmed out of third parties. They validate it. And that's the pay equity side.

That's what companies are typically trying to solve. The pay gap side is more around less like comp is the last step in the chain there. If we say, okay, like in the UK, for example, this might help illustrate it in the UK, we have to report on raw pay gap data. So that means you just sum all the pay for women, for sum all the pay for men, figure out the averages and see if there's a gap there. So what that highlights is it can talk about your pay policies, but can also talk more about who's sitting in what chair. The solutions for a pay gap, when you've got all of your women in middle management,

all of your men in senior management, that's raw pay gaps that you have to report. That's going to show it. Yeah, it would. Right, right. And that's why companies are trying to get after. But I figured, okay, so how do we get better representation within the leadership ranks for a company to try and solve that? Now, the much harder question, which, go ahead.

Yeah. If I can interrupt you there, and my apologies, I don't want to throw you off. But why do we need to solve that? If you're at a higher level in a business or a different level, your responsibilities are different. You're higher. You should be getting paid more. If I'm a CEO of a company, I should be getting paid more than someone in middle management, regardless of their sex. So why is that a pay gap then? So it's an insightful question in the sense that compensation seems that most large companies are not necessarily trying to solve that.

They're not trying to solve this because what they're saying is our pay policies are set for, you're saying the hierarchy of pay increases the higher up you go to the organization. So to solve the pay equity gap, they know how to do it. They've got policies, they've got pay ranges. That's what, not all companies are there. In fact, I would guess most of them aren't because they're not running super rigorous programs. That's an issue that some companies have gotten very good at solving, and it can be solved internally within their own company. When you have to report on the bigger wage gap around the entire pool, whether in society or whether in your entire company, those are really signals about economic mobility among different groups. So if we're saying, if we look at the Fortune 500 right now, I'm going to probably bust a number, but I

think about 40 of the ceos are women four of them are black and all four of them are black men i think i only recently like very recently like the one the first black woman or one of the first black women was appointed to the ceo chair of a fortune 500 company so i think when we talk about pay gap like that raw systemic stuff that's starting to ask questions around well, why do all companies look the same? Why is a white guy at the very top of the organization? And then taking that a few clicks down and saying, well, wait, how come like only 5% of our director level people are women or black or whatever? And that's to say like that asks much harder questions, much further upstream. So what I like to say is your compensation team is last in that line to figure out once you get

people in the right chairs, then how do you pay pay them but what we can't solve is this stuff way upstream we are less we are less the canary in the coal mine on the compensation team saying that you've got like trouble coming up we're like the black lung disease that you get years after working in the coal mine so like the like the raw pay gap is just a it's just a function of who are you promoting who are you high are Who are you hiring? Are you creating ceilings for gender or racial lines? And then how do you solve that for around your recruitment policies and promotion policies and all that stuff? And then pay is a natural, having good pay policies is a natural output at the end of

that process. So this is why we have a lot of confusion because my industry has not done a great job explaining what we're trying to get after on this. And it's quite complex. And I do hope people will read the chapter because I think I articulate a little bit more cleanly in the chapter than I'm doing right here. I'm going to be reading this book because I really want to solve, I really want to understand this problem. And I'll be the first to admit, I don't know what the answer is. I hear all sides and I hear so much data, but professionally, I think you are experts in this. So let me ask you this.

If I have a marketing team, okay, of six people, three are guys, three are women, and they're like, hey, Chris, there's a pay gap in your thing. Now, let's say two or three of the guys have worked for me for, say, 20 years. A couple of the other women that are on the team, maybe they joined in most recent years, maybe, and stuff like that. And I've got a follow-up that'll throw even more devil's advocate into this. But does that get shown as a pay gap,

even though it really isn't? Because these people have been with me for 20 years. They've worked their way through the system. It's likely they'll be being paid more than somebody who just got to that level within the last few years is that also a thing that you're hitting the complexities of this stuff right so in your exact example and your exact example like if there are only six like i'll spare people the statistical stuff around this but there's not technically enough people to run a statistically valid pay equity analysis on this right you probably need 30 40 people to say okay

have we controlled for all the variables to make sure that this particular variable of gender is popping um but let's say it wasn't three and three let's say it's 30 and 30 and you still have that problem and we feel like we have the validity that we can say that there's a pay equity gap there. Now, one of the variables that you would say is an acceptable factor for pay differences is the experience that you've just said. So if the men happen to be more experienced and to your point have progressed further up in the pay range, you would say this is acceptable. We have not, we have no pay equity gap according to our own standards. Now, one of the challenges is there are no legal standards here. So technically it's illegal to pay somebody in the US

a difference based on gender, but there's a massive loophole carve out for performance related pay. And so if you say it was based on merit, then you basically drive a truck through any potential definitional ways of doing this. I hope that changes in the future, but when you have smaller teams,

or then in your example, you would have a pay gap. But you might look at it and say, actually, we don't think we need to solve it because these differences for our internal processes are explainable. If the women are new on the team, and they come and they're upset about their pay. And then as a manager, most companies would feel confident saying, listen, this set of three men on the team, it's not because of genders, because they've got 10 more years experience or whatever it is, and they've gone up through our system in the same way. Now, this is where things get super messy, right? It's hard to have these pay conversations are extremely complex. But in your example, yeah, you would officially have a raw pay gap, but you might choose to not do anything about it because you can explain it.

So let's play a few other variables and tell me if they are variables or if I'm just smoking crack. I've hired thousands and trained thousands of employees across my career, whether it's with the Cincinnati Bell or my own companies. And I've seen these transitions. One transition I've seen is women leaving to go have children and then wanting to come back in the workforce. And I want to address that as, is that a factor too? Because if I'm paying somebody who's been on my workforce 20 years, who's a man and a woman who's maybe taking time off, do we need to balance that out

to where even though you take time off, that's not a thing, but it still is really, if you take time off and come back, you are getting behind in the system. Do we need to bump that or is that fair? These are very complex questions. And maybe we look at very egalitarian societies like some of the Nordic countries, right, where your paternity and maternity leave could be a year plus. There are very strict rules around pay and the overall spectrum from low to high is actually quite small in differentials like even with all of the stuff that they're probably 20 years ahead of where the u.s is on some of this legal stuff but like they still have pay gaps where the u.s is raw pay gap remember just the kind of the additive side of it is 18 or so in a place like norway it might be seven percent so it's still there and so to some some extent, you know, of course, if women are still are seen as the primary caregivers in society, then if they step away for it's one thing if they step away for if a woman steps away for a year, your policies might look different than if somebody fully resigns, leaves the workforce for whatever, five, 10 years, and it comes back when their kid's approaching middle school. Yeah, the man in that situation, if they were primary caregiver,

would not have kept up with the men who stayed either. So really, it's just a function of the choices we make in society around who primary caregivers are. But I do say there are plenty of opportunities for companies to clean up their policies in this regard. So some companies have, let's say you're in a sales role, a big sales role, and a client relationship might take you whatever three years to really develop to bear fruit was three years. She was gone for 18 months, but she did all the work up front. But then you've dinged her for the payout because she wasn't technically physically at the job. Like those kinds of things, like you can try and design your programs around to make sure people aren't penalized around some of their programs to make sure that if you go on maternity, paternity leave, like you can come back and make sure that you're not, you're going to basically pick up where you left off. So I think there may be some, I think what you're hitting at is other situations where that primary caregiver

will continue to get paid or essentially like a bridge payment. Those are things companies may want to consider. Most definitely. And let me play devil's advocate again. One of the problems I had as an employer was my top paid people were salespeople they were commissioned people and we would pay them a draw when they would start so we would help people so you pay the bills for the first couple months until they could build up their pipeline and we had a great system where we were guaranteed to get our money back and but one of the problems i had in the state of utah was I couldn't get women to take those sales positions. I would drive me mental because we wanted a balanced workforce.

We wanted an equality of workforce in our telemarketing divisions, in our processing divisions, in our delivery divisions and other companies that we owned interest in. We had a balance, especially in processing. Like processing, that was always, actually we had more women than balance, especially in processing. Actually, we had more women than we had men in processing. And I think women maybe are better at that articulation and that attention to detail because of their ability to multitask and everything else. But part of the reason for that was the security element of it. Women would always ask me when they went interview for the sales position, what's the health what's the health benefits, what's the insurance and what's the security. And women are definitely more security driven than they are like males who will take high risk and more performance sort of stuff.

They're the guys who will work late at night. They'll go the extra miles, at least from what I found. And women are more concerned about being at home, taking care of the children. They want to be home on time. Routinely, the women would leave my office at five o'clock, punch out and be gone. And the guys would be, I think a good example is, what was it? What was the movie? Al Pacino working in a bar late at night, selling the crap out of anybody and everybody. Glenn Ross. Those were my sales guys, the Glenn, Larry, Glenn Ross guys. And so technically my guys that were the sales guys. Now, when I moved out of Utah, it changed a lot. Vegas, I was able to hire a lot more saleswomen that were commissioned. There were a lot more women, but usually they were

largely single women who didn't have a family at home and were willing to play that wrist ball because they could give it that sort of time and element. But I imagine that mucks with the pay gap as well, because my guys would be making 20 or 30 grand a month. And my processors are getting paid. I think it was like $2,500 a month. They didn't get paid a month. They had security. They would always get paid whether they did their job or not. Yeah.

What I might say is to those gentlemen who are married and have families, go home, please. Go cook for your family. Go contribute because doing all that emotional and professional labor on your spouse is probably not great. So I can think of this story. So Uber, a number of years ago, went through, they lost Travis Kalanick for lots of reasons. One of the things that came in Brazil, I think Eric Holder went in, the former attorney general in the US under the Obama administration went into this whole review because it was just like a super public falling out with Travis Kalanick.

And Uber was one of these companies in Silicon Valley that like, we're going to keep you here. We're going to make you so comfortable you never leave. We're going to run dinner service at 9 p.m. And so you never leave and you can't have a family that way. But like one of the solutions, which was like ridiculous to me was, okay, I know what we're going to do. We're going to make sure that our recommendations, you're going to move dinner from nine to seven. I'm sorry, if you have young kids at home, like seven is still not going to cut it. So there may be, I'm largely convinced that the people who like this hustle culture, people

are working 80 hours a week. I'm pretty convinced that it's not as productive as they think it is. So I think some of the most productive countries in the world are also countries that have really egalitarian and thoughtful policies around people's time. Flexibility, I think sometimes is used. I actually talk about this in the book where flexibility is used as what I call the total rewards trap. Total rewards being your entire combination of work-life balance,

pay, benefits, all of that kinds of stuff, career development. So everything the company offers you in exchange for your work. But sometimes you get this kind of thing for when it comes to women or people or even same sex couples with young kids at home. It's like, we're going to pay you for your time. We're going to pay you in flexibility. Now, that doesn't mean they're any less productive, but I think it will challenge companies to say, okay, can you get done in four hours and somebody else gets done in seven or eight

and then go home and be with your family? I think we will all be better off in that regard. Utah is an interesting state. Again, Utah is probably not going to be the same as Vegas. Those are pretty extreme examples. But I think to some extent, like leaders just have to model behaviors to say, you'll do your best work when you're a whole person

inside and outside of work and when you're taking care of your responsibilities. So I would say, man, please go home every single hour and contribute. You'll do your best work when you're a whole person inside and outside of work and when you're taking care of your responsibilities. So I would say, man, please go home every single hour and contribute. Here's the other aspect of that that I left out. A lot of guys will go for high risk, high reward, but normally in the single space. So there were a lot of times where I'd have guys that would come to me and they'd be like, Chris, I'm making like 20 grand a month. I just got married.

I just got in a relationship. She wants security. We want to have kids or they have kids. And I need to quit my job so I can go to work for a bigger corporation that has like really great maternity package and this high end stuff. And I'd be like, you're making 20 grand a month off me. You can buy that insurance, but you can buy the insurance that you need, but I'm sorry, I'm not paying you. You want this super cut of commission, but now you're telling me you want this thing. And they would usually quit and leave for corporate jobs where they would get paid, I don't know, like 50,000 a year, but they would take the pay cut for the security. So there's a balance there where people go for

that in the high-end commission. So I would lose them usually when they would get married or have kids, they would exit out of that sort of system. But I can imagine that fucks up the pay gap. When we look at these, the broad numbers, like you said, and we compile. Yeah. Now high-end sales jobs are, I would guess a pretty small percentage of the overall economy. And so, but even then, I think a company who runs those policies has an obligation. If most of their staff or a good chunk of their staff are, are a direct sales and they're being kind of commissioned, but the calculations for your pay equity gap, they're probably going to look very different than a traditional company, but they would still want to understand what's driving it. Is it truly performance or is it we have a habit of setting our client calls 8pm

dinners, which again, if the women are the only ones responsible for taking care of the kids, this is a hard balance of, is that truly necessary to run your business that way? Or there are other things we can do where we can get the best of both worlds to make sure that people are feeling that they're treated fairly, that they're paid, that everybody has the same opportunity. Sales comp actually is its own sub-function.

Like there are separate certifications of things in my field just for sales comp because it gets, these questions get- Yeah, and I would imagine even though with, you know, what you said about the small percentage, I was married with big companies. There's not only salary, but there's performance pay or bonus pay. Guys are typically networkers and builders and we team up. This is one of the reasons we rise through corporations is we club up and we don't claw each other down to keep each other from getting ahead. We, we club up and move

up. The other thing, the question I have for you about the pay gap is, and this is something that's part of the argument, so maybe you can give us some clarification. Women don't normally get into heavy labor fields largely. And those are usually much higher pay fields if you're working in a smelter, if you're welding, if you're, we don't see a lot of women in the welding field. There's women in the welding field, but these hard labor, high paid jobs, does that muck up the numbers as well? I would actually challenge the, the argument that they're actually paid more. I think that was probably true decades ago. I don't think that's true anymore.

There's this crazy story this past week where I think Biden was executive order to increase federal firefighters to $15 an hour minimum wage. And people freaked out. I was like, these are firefighters to increase federal firefighters to $15 an hour minimum wage. And people freaked out. I was like, these are firefighters, like federal firefighters. They were making less than a Chipotle shift worker. What is going on here? And so I look at this data a lot. You know, I've worked for companies that do manufacturing, that do distribution centers,

like the hard labor stuff. Honestly, what we're seeing is a lot of these industries are converging. So the idea that you've got the smelter and the Detroit auto plant or whatever, I wish this weren't the case, but like those jobs don't largely exist in the US as much anymore. I would say some of those things were probably more prevalent back then. But what I'll also say is like, what our jobs pay are a product of our choices. So in the sense that most of the jobs that are a lot of the jobs that our economy is going to create over the next 10 or 20 years are very human focused jobs. They're home health care workers or service workers of all types, maybe less in the manufacturing space.

But what they get paid, like I'm convinced that having looked at this data all day, every day, is that the most important force of driving pay is not intention, but inertia. Like these jobs get paid this because we've said they do a bunch of years ago. So an example that I can use is in the 1930s, when the U.S. first launched the Minimum Wage Fair Labor Standards Act, like kind of the here are the rules basically for labor law in the U.S. What they did not include are were huge sectors of the economy that were populated by women and minorities. So things like restaurant workers, hotel staff, agriculture, all of that just were not included in this.

In 1967, with the Civil Rights Act, 64, 67, I don't have to look that up. One of the things they did was to try and close and say, now everybody's eligible for these laws. What they found, researchers have found since then, is something like 20% of that raw wage gap was closed by just including them in the law. So this makes my point around, we think that there's this grand supply and demand-based free market for pay. But oftentimes, we've made a choice around what these jobs should get paid, and then the nurse is trying to take care of it.

So I talk a lot about this in the book to say, we think there's a free market. It's at best free-ish for pay. And I think it's because only one side is the information around pay, right? Like you can't necessarily control the price of your labor because you don't know all the different shops around the country you're paying. What we're seeing now, especially for low wage work, is a lot of convergence around industries. So if you're in that entry band of employment, and you have a choice between working at Chipotle, Home Depot, you can drive Uber, you can go to an Amazon distribution center, like that, those things are all converging to

each other now. And so I think whereas pay used to be very segmented across that. So I think those kinds of increased competition is going to be good for workers across all across however you want to categorize them. I think that the competition stuff is super healthy. So we're striving for perfection. Has any country or any business nailed this thing where they've gotten perfection on pay gap and equity and they've gotten this thing down. Has anybody gotten there yet? No, the answer is no. And you pay, well, perfection is not something we're ever going to achieve. People are, when you throw people in the mix, things are going to get messy. One of the things that's true about my industry as a whole

is like, nobody's ever happy regardless of the number you pay them. People get used to that number very quickly. So it's, it's just built into what we do that people are like, how are you managing pay? It's just like, who's the most angry right now? And what do I need to go try and fix? So like, it's very whack-a-mole. What I will say is,

so there's this software company called Buffer and it's like every comp person's go-to. This might even help explain some of the payments. We've had video on the show. Oh yeah, okay, yeah. So one of their, what they're really known for is how they pay. And it's all formula- based and it's incredibly transparent.

Like you can look up now what everybody is paid at Buffer. But the way they do that is like when you do that, when you make the more transparent you get, the less discretion you get. Like that's the natural way of things in pay because it's, you want to try and normalize and formula, formula some of this stuff. When pay is entirely transparent and it's formula-based, you will have, by definition, a 0% pay equity difference, right? Because the only thing that matters is how you show up in the formula based on factors of your experience and the job you're in and all that stuff.

Even in that scenario, you can have a pay gap. I don't know this about Buffer, right? But if their entire senior leadership team are white guys, like they're going can have a pay gap. I don't know this about Buffer, right? But if their entire senior leadership team are white guys, they're going to show a pay gap. Again, these are the two definitions, right? So the answer is there's really no perfection on this. It's just about managing it. And what I talk a lot about in the book is pay really, it has to just be a mindset. Are we constantly evaluating how our people are showing up in our payroll systems, on our Excel worksheets or whatever it may be? And this is something that just has to be constantly monitored and maintained because people just do not trust the process right now. Wow. This is hilarious. We had Leo Widrich, the co-founder of Buffer

on the show, the podcast. He's actually podcast episode number 12. Okay. This is almost podcast number 800. Looks like we spoke to him in 2012, but I just wanted to make sure I had that name because I was shouting it out from memory. But I've watched Leo and been friends with him on Facebook and I've watched him evolve. And I remember when they dropped, I was actually in his influencer program when they first launched Buffer for several years where we got like the free accounts and gave him a plug and shout out every now and then. But I watched him announce that, that pay transparency system that they did. And I was like, okay, buddy, that sounds like a load of fun, but good for you.

So let me ask you this. Do we need to legislate? Do we need to legislate a $15 an hour minimum wage federally? Do we need to just put that into place or is that a good thing or a bad thing? I think $15 an hour minimum wage is a good thing. So whether we need to legislate it, I would hope we build the kind of economy and ecosystem and leadership capacity where you don't need to. So the idea that I would hope that, and a lot of people are saying, David, you're completely naive on this. And trust me,

I live in this data, so I know how naive I am. That every business leader is going to wake up and say, you know what? My people deserve a living wage or something close to it, or they need to stay on the agenda. I do think there absolutely must be a hard lever option at the bottom of the pay market. So whether that's an indexed living wage that's much higher than it is. My home state of Florida just voted for $15 an hour. It'll be there in the next three to five years somewhere, but it got like 60% of the vote. Like minimum wage is super, super popular nationally. Like I think people don't necessarily appreciate that, but it's a very popular policy. So if it's not minimum wage,

it's index. Like you could look at something that's what we call sectoral bargaining. For example, you'd see in Europe or in Australia, places where you don't like, it's a different way of doing a union where it's not I go argue with my managers of my company. It's the entire industry. So fast food is making the standards for fast food. Gig work is making the standards for all of gig work and just go sector by sector. And then that allows you to meet the needs of that entire sector that gives the platform for all companies to compete on the same standards at the same time. But I'm a huge proponent. I think you need to have a really hard, like a meaningful lever at the bottom to make sure that wages are increasing as companies do. Now, I think there's ways you

can design it to say if unemployment takes to this respect, maybe we can do temporary drives or companies that are very small don't have to participate at the same scale as bigger companies. I think big companies have to drive this stuff. They have to set the standards because they have the means to do it. And trust me, I know the numbers. I really know the numbers on a lot of these companies. They have the means to do it. It's really just about the priorities they choose. And I'm all for raising the wage gap. To me, a rising tide lifts all boats. And if you set the economy that if everyone's got more money in the economy to spend, the economy grows and it lifts. If they don't, or if they're just not

spending the money they're sitting on, consumer confidence index, et cetera, et cetera, then the economy suffers. But a rising tide usually lifts all boats. One thing that's kind of alarming, there's two different things. One is like what you mentioned where people are starting to legislate a minimum wage. But the funny thing is they're putting it years off. It has to increment and grow and kick in, which is probably good for people on Main Street. The problem is I look at it and I go, actually, five or six years from now, it probably should be $20 an hour, especially inflationary sort of struggles that we're seeing right now. The thing is I've seen Amazon promoting, everybody's paid $15 an hour. We're all for that because they can afford it. The guys on Main

Street, the little guys right now, especially that are crawling out of COVID, they're just barely hanging on. They can't jump to $15 an hour to compete. And you're seeing that in the small wage market, especially entrepreneur markets. McDonald's still hasn't quite got there. They could if they wanted to, but then a guy who's just running a restaurant, a guy like me, who just has one restaurant, he can't quite get there, especially coming out of COVID. And they're having problems. Like I was listening to a discussion last night where there's a guy

who has a Mexican restaurant that's hugely popular in Las Vegas. And the problem is he was having 45-minute waits where people were upset. They were having to wait. He just only served so many. His problem coming out of COVID is he can't hire enough cooks and enough workers to show up to do the work. And so he actually has to close on Monday and Tuesdays so that he can make sure that when people show up, they don't have a 45 minute wait. So taco Tuesdays are out at the Mexican place. But this is the problem he's trying to resolve and he can't deal with the whole balance, but Amazon can.

Yeah. So yeah, I'm completely empathetic with the point you're making. One of the things that I think none of us really know the answer to is what are we going to look like in six months? Because I wonder how much of this is just pure dislocation from COVID, right? If we got up to something like 14% unemployment, there were crazy stats where if you made less than, I don't know, $40,000, you had above 50% chance of getting laid off. And if you made over $100,000, you had an almost zero chance of getting laid off, right? So there are jobs that are stable in the economy. And then there's the great majority of jobs that are not stable. And we chose to do as a country was to just lay everybody off and rehire them again.

Like in my state of Oregon, even through the end of the school year, schools are only open two days a week. So there's all sorts of things going in to say, yeah, child care is not up. There's unemployment, a stimulus. People are just generally sick and tired of being treated like garbage at some of these employers. There's obvious safety and sickness concerns broadly. So I think like I'm curious how this shakes out in six months from now. And like I hope things are back to normal because I'm seeing these signs, too.

Right. I went to get my haircut yesterday and one of the locations only had a couple of people there. And this is the same thing. So the problem is real. Absolutely. What I'm wondering is how permanent it is. And I get the sense that it's not. I'm super empathetic to the small business on this. I firmly believe that big business does need to lead in this area. And we can design policies in such a way that you can provide more relief to the small business or say, okay, if your wages are going to go to backstay by this time horizon, and we do this all the time now, a lot of the wages are, okay, if you'reay by this time horizon. And we do this all the time now. A lot of the wages are, okay, if you're a small company, you're on a different schedule.

You have to get there by this point of view. What I think is one of the problems is we have created huge sectors of our economy that are, frankly, addicted to low-wage labor. And so there are going to have to be some shifts to our business models. And I think to some extent that low wage, like the price and price of our products and wages can be a bit arbitrary and can be a set, will probably just need to be rebalanced a little bit. And I think no doubt we're going to see some price increases.

And I think we already have. Yeah, we're at hyperinflation almost. Well, it's not like Zimbabwe, right? We've gone from like 2% inflation to, I don't know, three, four. So there was, and again, I think I'm curious where this comes in six months from now. Is it, how much of it is supply chain issues? How much of it is structural? What I hope is that some of it for wages is structural. And because there's, I keep bringing up Chipotle for some reason, I must be hungry. But like there's this big article, Chipotle is some reason, I must be hungry. But like, there's this big article at Chipotle, it's raising the prices of the burritos by 4%, right? So let's say you go from your, I don't

know, 30, 40% or whatever on your burrito. Now, if let's say across the board, all prices go up 4%, but your wages have gone from 10 to 15, you've got a 50% increase, like you, like our lowest sector of the economy, part of the economy is much, much better off in that rebalancing of the economy. Now, I think one of the things that people underappreciate is inflation is going up 4%, wages go up 4%, it's just a wash. You're not getting it like you're just resetting the standards. I think the reality when you look at most companies payroll is they might have, I don't know, if you're a big retailer or restaurant or whatever, you might have 80% of your people in these jobs, but they might only be 15, 20% of your overall wage expense because they make so little in relative value. So if you've increased the wages, if you're forced to legislatively or for market reasons or whatever, if you have, if you increase their wages,

that's not like on a proportion basis, things are going to come out. Okay. Like I think that there's this perennial, we can't increase wages because then all prices increase and it's not like on a proportion basis, things are going to come out okay. Like I think that this is perennial. We can't increase wages because then all prices increase and it's not really going to matter. I just do not buy that. I know how companies make these calls and you don't hear those decisions when you need to make some massive stock grant to an executive who turns out to not be so great. You only hear those arguments when it's the lowest wage people in the economy and that's what drives me nuts. Yeah, largely. But we're seeing some extraordinary stuff.

If you've tried to rent a car lately. I have not. Or travel. Yeah, but I've heard the stories on the car. It's out of control. Or buy a used car. And I'm having a lot of people write me from our review side of the Chris Vosho company. We're reviewing a lot of products.

And they're starting to have issues where they can't produce because of the chip crisis. And a lot of the Chris Vashow company, we're reviewing a lot of products and they're starting to have issues where they can't produce because the chip crisis and a lot of the stuff that wasn't in. I don't know if this is going to resolve itself or if we're just going to keep seeing rampant increases. Like you say that we're already seeing inflation that come up and it's like, how does this all catch up? And then there are pressures that are on our economy at the federal reserve

level. We floated trillions of dollars off the chart. That has an economic inflationary pressure and thing. Anyway, you and I could sit and talk about this for 12 hours. I bet we could. Yeah, absolutely. And I value your time and I really appreciate what you've shared. Is there anything more you want to touch on in the book or respond to what I've said? And before we go- I would just say, I think you're asking all the right questions. I think you're asking the questions that I hope to have resolved in this book. I think this is when you do pay for a living, you tend to get the same questions over and

over again. And I think just fundamentally, we need to have a better, more sophisticated conversation about pay. And that requires people in my chair to talk about it more and to talk about the data we have access to, what we're seeing, what the realities are, do some myth busting and help people get more money. And that's really all that I'm trying to do. I do not believe that we have to give up on our overall economic system. I think this is just a product of the choices that we are making.

And I am optimistic about the future. And I'm actually extraordinarily happy to see this much competition at the employee level, because there really hasn't been anything like this in my career before. That was one of the discussions we were having last night too, is this sustainable? It seems like the power is going back to the employee, but whether or not it'll be sustainable or whether not corporations will be like, well, that'll be nice now, but we'll get back to you later and we'll fix that. There's a whole lot of other discussions, pan-globalist billionaires and people like the Betsy DeVos Center for National Policies who have interest to enslave the American people

and basically create indentured servitude and be able to ramp an uncontrolled capitalism and the lowest pay they possibly can. There's some of the narratives behind this finding of the wage pay gap and all those sorts of different stuff. Reading your book, I'm really going to be reading this book. So I encourage my people to do it. And I don't believe that we should be arguing for those people that are out there arguing that

the system is fine. We shouldn't change it. It's not. There's always a way to improve everything. And there's always a way to move to a better balance in society and everything and give everybody equity. And I'm all for that as well. Give us your plugs so people can find you on the interwebs as we go out. Sure. So davidbuckmasterbooks.com is where I'm keeping press, reviews, all that fun stuff about the book. I'm on Instagram, LinkedIn, Twitter, whatever your chosen social media preference is. And the book is available, hopefully, wherever you like to buy your books. There you go. There you go. Thank you for spending time with us on the show, David. We certainly appreciate it thank you uh thanks for having me there you go and my audience checking out fair pay how to get a raise close the wage gap and build stronger businesses by david buckmaster

you can get it wherever fine books are sold but you only have to go to the place where the fine books are sold because i don't know why It just sounded good to say at the time. Thanks, my friends, for tuning in. Go to youtube.com, Forge House Christmas. Hit that bell notification button. Go to goodreads.com, Forge House Christmas. See all of our groups on LinkedIn, Twitter, all the different places, and follow us there as well.

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